The situation at the Chinese real estate giant is tense. The company’s course is recovering. But investors are still waiting for news of whether interest payments will be made.
The hard-hit Chinese real estate group Evergrande rose sharply on Thursday despite persistent fears of default on the Hong Kong stock exchange.
Evergrande shares ended trading up around 17 percent to 2.66 Hong Kong dollars. At times, the paper had even risen by over 30 percent.
According to observers, investors reacted to an announcement from the previous day that the company could get some breathing space. Evergrande announced on Wednesday that the company had agreed with creditors to pay interest on a bond traded in Shenzhen, southern China, which matured on Thursday. The Hong Kong Stock Exchange was closed on Wednesday for a public holiday.
The Chinese group has debts of the equivalent of more than 300 billion dollars. Investors fear a default. The corporation has to raise money to pay banks, suppliers and bondholders on time. In addition, Evergrande owes retail investors, including many employees, billions of dollars.
The fact that the company has still not provided any information on another offshore bond traded in US dollars caused continued uncertainty. According to calculations by the financial service Bloomberg, Evergrande had to make an interest payment of 83.5 million US dollars (around 71 million euros) on Thursday. Another interest payment of $ 47.5 million is due on September 29th. According to Bloomberg, there is a grace period of 30 days for both payments, which could give Evergrande more time.
As Chinese state media reported, Evergrande boss Xu Jiayin tried again to allay fears in a special session on Wednesday evening. It has top priority to pay customers of investment products, said the CEO accordingly. Everything must also be done to resume the construction of unfinished apartments and to protect the interests of the owners.
A major Evergrande shareholder announced that it no longer wanted to hold on to its stake. The Chinese Estates Holdings, the second largest shareholder in Evergrande, announced that shares valued at $ 32 million had already been sold. Later you want to completely separate from the shares.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
